Step one of your job search: announce that you are looking. I went on facebook and posted a status update to all of my friends and family. I got an overwhelming response of positive messages and job leads, ultimately leading to a great job. This was in March 2010, so the economy was officially screwed by this point.
I like facebook. But as it becomes more popular, you start to collect more and more "friends" who you wouldn't normally hang out with, like your boss. It's also not unheard of for a prospective employer to stalk your facebook profile during your interview process.
Keeping your information private is common sense, but it's also a very easy mistake to make in haste. So here's how you fix your privacy settings on facebook.
At the home page, click Account --> Privacy Settings.
Under Sharing on Facebook, click Custom.
At the bottom of the list of text on the right, click Customize settings.
At the top of this list, where it says Posts by me, click on the box at right (mine says Friends Only) and select Custom edit.
Make this visible to Friends Only (or be even more selective, it's up to you). Under Hide this from, type your boss' name and anybody else you don't want to see your status updates. Save settings.
Your settings for Posts by me should now say Custom.
That's all there is to it. I prefer facebook over other more professional social networking sites, because it's a direct link to people (family and friends) who will typically go the extra mile to help you succeed. In my case, using facebook is much more effective than any recruiter has ever been.
Anyway, more on this later. Clearly facebook is only one piece of the puzzle -- you need to fix your resume and other things before you can get a job -- but it's a great place to start.